Report summary: Event: The company released its 2017 interim report and achieved revenue of 371 million yuan, a decrease of 43.29% over the same period last year, and net profit of 71 million yuan, a decrease of 69.60% over the same period last year. Among them, the rail transit business achieved revenue of 107.945 million yuan, a decrease of 95.70% from 251 million yuan in the same period last year. The main reason was that the delivery cycle of rail transit vehicles was delayed due to factors such as project construction progress and customer demand progress. Bridge functional components maintain a steady development trend and good profitability. The company is one of the enterprises with the most complete variety and product chain in the field of bridge functional components. In the first half of the year, bridge functional components achieved revenue of 276 million yuan, which is basically the same as last year, with a gross profit margin of 32.33%. It continues to maintain strong profitability, and its position in the industry is further consolidated. Rail is the only mature competitor other than CRRC. The urban rail industry has hundreds of billions of dollars in space, and there is a high probability of success after introducing war investment. The company has a good card. It is the only company in China that has qualifications, production capacity, and historical performance in subway assemblies and streetcar assemblies other than CRRC. 1) The company has received an order of about 170 million yuan for the Chengdu Rong Line 2 (IT Avenue) streetcar embedded track system, which is conducive to the promotion and use of the company's new rail system in rail transit projects in other cities in China. Currently, the vehicles for this project are being prepared for bidding, so the possibility that the company will receive a vehicle order is not ruled out. 2) The company participated in the construction of the R1 line of the modern streetcar demonstration project in Xinjin County, increasing the probability that the company will receive orders for the remaining 5 tram projects in Xinjin County. 3) CRRC successfully won the bid for the Chengdu Metro Line 5 vehicle order, with an order amount of several billion yuan. The company and CRRC have a joint venture. Following the previous model of CRRC taking orders in Changchun and long-term passenger construction, new construction may benefit from it. Equity incentives bind core employees and lay the foundation for the company's long-term development. Recently, the company announced a restricted equity incentive plan to grant management and 166 core employees a total of 10.43 million shares. This equity incentive plan helps bind the company's core employees, ensure the stability of the core team, and at the same time clarifies assessment goals, laying the foundation for the company's long-term development. Investment rating and valuation: The company's net profit for 2017-2019 is estimated to be 50 million yuan, 149 million and 255 million yuan, EPS is 0.08 yuan, 0.23 yuan, and 0.39 yuan, and price-earnings ratios are 101 times, 34 times, and 20 times, respectively, giving it an “increase in holdings” rating. Risk warning: bridge components and tram business development falls short of expectations